This week, President Trump announced that a peace deal with Iran has been approved by all involved parties, with a potential signing set for the weekend. This declaration comes amid a backdrop of escalating tensions, with both nations exchanging attacks earlier in the week. Oil prices have reacted positively, dropping to $85 per barrel, amid renewed optimism despite past failed agreements.
Additionally, the Consumer Price Index (CPI) revealed a three-year high inflation rate of 4.2% year-over-year in May, largely driven by a significant rise in energy costs, which accounted for 80% of the increase. In contrast, core inflation, excluding food and energy, saw a slight rise to 2.9% from 2.8%. As the Federal Reserve prepares for its next meeting, markets are projecting a 20 basis point increase in rates this year, although many economists anticipate no immediate changes.
Market movements indicate a positive outlook, with the Nasdaq-100® climbing 2% over the week and 10-year Treasury yields decreasing by 5 basis points to 4.5%. Key economic events to watch next week include the Federal Reserve’s interest rate decision and monthly reports on industrial production and retail sales.
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